The Business Bytes
NEW DELHI, JUNE 14, 2024 (TBB BUREAU): Despite a widening trade deficit reaching a seven-month peak of USD 23.78 billion in May, India’s merchandise exports demonstrated resilience, marking a significant 9.1% increase to USD 38.13 billion, as per official government data.
This robust export performance was underpinned by notable growth across key sectors such as engineering, electronics, pharmaceuticals, textiles, and plastics, even amidst prevailing global economic uncertainties.
Import figures also saw an uptick, rising by 7.7% to USD 61.91 billion in May 2024 from USD 57.48 billion in the corresponding period last year, primarily driven by heightened crude oil imports.
The surge in oil imports registered a substantial 28% increase to USD 20 billion in May alone, contributing to a cumulative rise of 24.4% during April-May 2024-25, reaching USD 36.4 billion.
However, gold imports witnessed a marginal decline to USD 3.33 billion in May, down from USD 3.69 billion reported in the same month of the previous fiscal year.
The trade deficit reached its previous high in October 2023 at USD 31.46 billion. April 2024 witnessed a slight dip in outbound shipments to USD 41.68 billion from USD 41.96 billion recorded a year earlier.
Cumulatively, exports during April-May of the current fiscal year showcased a 5.1% rise, amounting to USD 73.12 billion, while imports surged by 8.89% to USD 116 billion.
Commerce Secretary Sunil Barthwal expressed optimism regarding the export performance, citing an encouraging trend in May and expressing hopes for its continuation. He highlighted the potential boost in purchasing power due to slowing inflation in advanced economies, which could stimulate demand for imports.
While addressing concerns about the widening trade deficit, Barthwal emphasized India’s robust economic growth, which could lead to increased domestic demand for imports. He stressed the importance of balancing the deficit through avenues such as foreign direct investment (FDI) and services exports.
According to commerce ministry data, services exports in May were estimated at USD 30.16 billion, compared to USD 26.99 billion in May 2023, while services imports surged to USD 17.28 billion from USD 15.88 billion in the same period.
India’s exports to its top five destinations – the US, the Netherlands, UAE, Malaysia, and the UK – displayed healthy growth in May, further underscoring the resilience of its export sector.
